The Target Price For J.C. Penney Company, Inc. (NYSE:JCP) Is $9.50 As Pegged By The Goldman


Dallas, Texas 12/20/2013 (FINANCIALSTRENDS) – As per the recent announcements made by the Goldman Sachs Group Inc. the target price for J.C. Penney Company, Inc. (NYSE:JCP) is set at $9.50. As per the Goldman the JCP is trying to concentrate on private labels and it is going to help them capture the traditional base of customers and the overall margin will be driven back to their historical levels. Goldman also believes that there is going to be some incremental markdowns and that will happen due to re-merchandising.

Moreover JCP recently announced that they are reducing their portions of national branded inventory and are trying to emphasize more on their private label merchandise. J.C Penny is also trying to reduce its exposure to Joe Fresh assortment and will replace it with A.NA and JCP’s branded women’s wear.

Why the target price for JCP reduced to $9.50?

Lower gross margin improvement is being seen as the main reason for the reduction in the share price value of J.C. Penney Company, Inc. (NYSE:JCP) by the Goldman Sachs Group Inc. There are many industry analysts who are concerned about the declining gross margin improvements. These gross margin numbers are calculated after making estimates about the JCP’s merchandise reshuffling efforts and a holiday period for all their promotional activities.

The recent time for JCP has not been that good as it was expected and the losses seems to be increasing and the revenue numbers are coming down. Now the company has taken many strategic decisions to increase the number of customers. JCP has also started promotional activities and is hopeful of driving sales in the coming holiday season.  There are many industry analysts including Goldman who believe that company might also face some risks such as slower recovery of margins because of these promotional initiatives. But JCP is hopeful of turning the story into their favor very soon.